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ADMS 1000 - final.docx

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Administrative Studies
ADMS 1000
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Session 7 CSR AND BUSINESS ETHICS (CH.2 PAGE 38-73) 1. DEFINE CSR CSR is: *the obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interests I.e. Obligations that involve going beyond: - the production of goods/services at a profit - the requirement of competition, law, or custom *To create policies, make decisions & engage in actions that are desirable in terms of the values & objectives of society. I.e. ethical responsibilities to society EXAMPLES: 1) IBM funded the genocide – “bloody money” 2) Toyota has many lethal flaws but public still trusts them 3) Tylenol industry pulled out because of Sinai poisoning 4) Nike weren’t responsible for sweatshop industry 5) Coltan – Similar to blood diamond where minerals from Congo are used in technological devices - STAKEHOLDER : somebody who owns rights/ownership - SHAREHOLDER : somebody who is part of the rights/ownership 2. ARGUMENTS FOR AND AGAINST CSR Against CSR - Sole responsibility of business is to make a profit (maximization of profit) - Business is not equipped to manage CSR (business plays by its own rules and morals) - Business has enough power – shouldn’t dictate morality (workers should not have to worry about CSR) - Costs of CSR would be passed on to consumers & limit national competitiveness For CSR - Business should conform to social rules (not to violate social responsibilities) - Business talent, capital & expertise could ensure CSR (to avoid public criticism) - Could use its power for CSR, i.e. using its power positively (stakeholders has power within a network) - CSR provides long term benefits by enhancing business environment 3. DEFINE BUSINESS ETHICS - the standards/rules/principles used to judge what’s ethical and unethical - the rightness or wrongness of behavior * But there are many conflicting interests which may determine perceptions of what is right or wrong * The workplace is a “tangled web of conflicting interests vying for scarce resources” * Business ethics is about how we choose to resolve these conflicting interests. 4. RULE ETHICS, END POINT ETHICS Rule Ethics – based on rules and principles that guide behaviors (right vs. wrong) - Fundamental deontological perspective, which considers actions as ethical or unethical based on their relation to the rules and principles that guide behaviours MODELS FOR JUDGING DECISION MAKING UTILITARIAN/ END-POINT ETHICS - An action is ethical if … - The total utility produced by that act is greater than the total utility produced by another act that could have been performed in its place - Utilitarian asserts that an action is ethical if it produces, or if it tends to produce, the greatest number of people affected by the action MODELS FOR EVALUATING DECISION MAKING – APPLYING TO BUSINESS UTILITARIAN/ END-POINT ETHICS Consequences determine ethics (e.g. profits for shareholders, and implications for other stakeholders etc). Relates to ‘the greater good’, so an action is not unethical in and of itself. Challenges of this approach: How can we determine the greater good? What about “means”? MODELS FOR JUDGING DECISION MAKING RULE ETHICS - focusing on actions not their ends – relates to duty. What is ethical = what is required by valid, ethical principles and does not violate any of those principles. Rights Vs Wrong – assumes basic rules and applies them to a given action. MODELS FOR EVALUATING DECISION MAKING – APPLYING TO BUSINESS RULE ETHICS - focuses on actions not their ends – relates to duty and issues of right vs. wrong Assumes basic rules for social behaviour and applies them to a given action. 5. REASONS FOR UNETHICAL WORKPLACE BEHAVIOR ORGANIZATIONAL CONTEXT 1. Corporate Culture 2. De-coupling (to divorce the labelling of something from ethics & rules) 3. Job Routinization 4. Organizational Identity 5. Work Roles Recognition of Ethical Implications of Behaviour  Critical Evaluation of Behaviours Decisions to Engage in Ethical or Unethical Behaviour Session 8 COMPETITIVE & TECHNOLOGICAL FORCES(CH.6) PAGES 212-231 INDUSTRY LIFE-CYCLE/EVOLUTION - Closely related to evolution of technology - Lifecycles stages can be identified as follows 1) INTRODUCTION 2) GROWTH 3) MATURITY 4) DECLINE (2 MAIN CHARACTERISTICS FROM EACH PHASE/STAGE) INTRO STAGE/PHASE (EMERGENCE) - New industries emerge following innovations: - Technological (e.g. biotechnology) - Regulatory (e.g. satellite radio) - New industries are highly uncertain and risky and some never make it past the early stage (e.g. satellite communications) - Early entrants are small, entrepreneurial firms with a high degree of technological innovation as competitors search for the industry’s dominant design and standard (e.g. automobiles) - Seeks legitimacy (sociopolitical legitimacy refers to the endorsement of an industry, activity or organizational form by key stakeholders and institutions such as the states and government officials, opinion leaders of the general public) GROWTH STAGE/PHASE (SHAKEOUT) - Begins when the market converges around a single dominant design or technical standard - De jure occurs when a standard is legally mandated and enforced by the government or standards organization - De facto arises by virtue of common usage and is not officially sanctioned by authority - THE SHAKEOUT - Organizations whose approach does not conform to the dominant model either change or exit during a shakeout - SHAKEOUT: LARGE NUMBER OF EXITS FROM THE MARKET AS THE AGGREGATE OUTPUT OF THE INDUSTRY INCREASES  Strategies you can use during a shakeout: - Adoption of dominant design - Accelerates growth - Standardization of products - Lower prices - Dying industry: newspaper and libraries MATURITY STAGE/PHASE - Market growth begins to slow down; very little entry and rivalry becomes fierce among remaining firms - Market concentration increases with more exits and acquisitions - Products become commoditized and undifferentiated and innovations are incremental and process improvements - Shift in successful strategy and structure explains why few firms survive as industry leaders DECLINE STAGE/PHASE - The industry begin to decline as a result of changes in: - Demographics (i.e. baby food in the 1960s // baby boom) - Consumer needs/tastes (i.e. cigarettes are not as popular because of health awareness) - Technological substitution (DVDs replace VHS) - Competition becomes fierce in the decline stage as firms face tough choices regarding the future INNOVATION OF TECHNOLOGY 1) Innovations that involve changes to the product’s components but leave the overall configuration of the system relatively intact are called component or modular innovations 2) Changes in the materials used in car bodies are component innovations 3) Changes in the system’s architecture or how component’s interact is architectural innovation 4) Technological innovations that build on a firm’s existing knowledge and skills is competence-enhancing Session 9 GLOBALIZATION (ch.7) 1. define globalization - A process involving the integration of world markets and economies – facilitated by bodies such as NAFTA, EU, APEC, ASEAN, etc. - Includes cross border co-operation, FDI and economic interdependence 2. Reasons for going global *a process that is expanding the degree and forms of cross-border transactions among people, assets, goods, and services *refers to the growth in direct foreign investment in regions across the world *reflects the shift toward increasing economic interdependence: the process of generating one, single, world economic system or a global economy PUSH (drawn in profits) PULL (reduce cost and increase profits) 3. Types/forms of global business (244) 1. EXPORTING AND IMPORTING - merchandise exports are tangible goods transferred out of the country, while merchandise imports are goods brought into the country - exporting offers much more profit 2. OUTSOURCING - involves hiring external organizations to conduct work in certain functions of the company (i.e. payroll, accounting, and legal work can be done by outsourced staff) - i.e. Nike has been outsourcing for cheaper labour in China 3. LICENSING AND FRANCHISING ARRANGEMENTS - is an arrangement whereby the owner of product or process is paid a fee or royalty from another - franchising is a contract between a supplier (franchiser) and a dealer (franchisee) that stipulates how the supplier’s product or service will be sold 4. DIRECT INVESTMENT IN FOREIGN OPERATIONS - Foreign direct investment (FDI) involves the purchase of physi8cal assets or an amount of ownership in a company from another country in order to gain a measure of management control 5. JOINT VENTURE, STRATEGIC ALLIANCES - involves an arrangement between two or more companies from different countries to produce a product or service together, or to collaborate in the research, development, or marketing of this product or service 6. MERGERS AND ACQUISITIONS - two different countries could merge to create a new jointly owned enterprise that operates in at least two countries - this could also expand companies and networks to promote connectedness among economies 7. ESTABLISHMENT OF SUBSIDIARIES - create a financial aid for branch operations in foreign countries - these types of acquisitions allow efficient entry into a market with already well-known products and distribution networks 3. The mnc/borderless/transnational - Global businesses - They operate directly in some form of international activity i.e. JV’s, export & import, SA’s etc - They operate in at least two different foreign countries - They generate products/services through affiliates in several countries - They are usually very large i.e. accounting for much of the world economy - May be globally integrated – i.e. decision making at HQ/home country - May be multi-domestic – i.e. decision making in host country - Definition : (MNC) A business that has direct investments (whether in the form of marketing or manufacturing facilities) in at least two different countries is specifically referred to as a multinational corporation (MNC); they are business enterprises that control assets, factories, etc, operated either as branch offices or affiliates, and manages from a global perspective - (BORDERLESS CORPORATI
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